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Renting out a club to have an event

Renting out a club to have an event.
On the Friday night before Labor Day
The capacity is 700.
He says, "you can have the door.", but you will have to guarantee the bar for $6000
Does this sound correct???

Ha... thats really funny. So basically if you arent able to get people in the door, you owe that club the remainder of 6K what you dont make from the door, and who says the owner is going to be truthful to you anyway even if he does make 6K. It sounds like a rues to me and anyway you go, your on the bad end of the stick. Make sure to get everything in writing and negotiate for it. Tell him that you cant guarantee that but try and offer him something else you might be able to secure in return for not guaranteeing that he will get 6K from bar sales.

Labor day a lot of people will be out of town (depending on where your town is located). Most go to the beach, boats, lake house, etc for labor day weekend. Of course you will have those who do stay in your town but will there be enough of them in the demographic you want to come to the club that one night?

AMimindless

This club usually charges $10 on a Friday night, and his capacity is 700, so if I ask him to rent the club for an event and he say as long a you guarantee the bar for $6000...

In this business what would you consider a good night? Half capacity? Quarter capacity? I know full capaciy is the best, but what is a good night?

In a negotiation what would be a good response? Can I offer to straight out rent without a bar guarantee? I was thinking an offer of $3500 to $4000 to straight out rent. This is based on a guess on how much is a good night (50% or 25% capacity)

The question I have is how would I know how much is really made at the bar at the end of the event if I guaranteed the bar? This is why I thought of straight out renting.

So they usually charge $10 per person and it has a 700 capacity. So basically from the door you can potentially make $7,000 if you have a full club with the same people. Reality would be you have an influx of people throughout the night so if you have a full club through the night but let 50-100 more people in since people are going in and out then you can potentially make more money.

Some questions I have are...

What type of music is it going to be?

Are you throwing the event? (getting the entertainment, paying for the entertainment, and paying for everyone else who is working there on your dime)

What is your worst case scenario? You don't make enough money then you owe the owner a bunch.

Best case... You make enough money for him at the bar and you have a full club on labor day weekend when most people will be out of town, again, depending on where its located (i.e. - bay town or inland type of place)

Will the owner be honest with you with how much bar sales he makes that night or will he be greedy because he knows either way he can probably get more money out of you...

He doesn't have to show you his records of drink sales that night, for security reason since you could divulge the information to someone else.

There are a lot of ifs and buts. I personally would rent out the place for the night and just promote it like crazy and get people you know to promote it like crazy. It does matter what the music is, it does matter where its located (is it a bad area, crime?, etc).

Your best bet, in my opinion, for not being screwed would be renting out the place for a night. If you provide the talent, security, etc, you get the door in full, if you aren't then ask for half the door that night.

Now how much to ask for... You could ask him first and see how much it would cost to rent out the place for the night and promote it basically. It all depends on what you want to do. Are you trying to get in the promotions business, or are you just bored, with money to spend and what to spend it on a night to remember with all your friends and more at a club saying its your night? I personally still dont know enough.

This is how we rent out our place on the weekends for private parties. Usually make sure the bar (where we make our money) is guaranteed to make as much or a little more than if we were doing it ourselves. Otherwise you could lose money. Its a fair way to do it. The club lowers its risk when closing on a weekend night to someone it does not know. For all they know you could promise the world and 25 people show up when they would have had 200+. Once I know someone I lower or do away with the guarantee. If your renting the club with a guarantee you should get the door no matter what. With this setup they should only get the bar.If your sure of your event I would take the $6000 guarantee instead of offering cash. If he reaches $6000 in sales you keep the door and owe no rent.

Thanks for your response

I want to promote events to raise capital for my future lounge, club, or beach bar in the islands.

This venue is in a good part of town, and it would be marketed to the Caribbean massive, because this is the weekend that there is a big Caribbean Parade on Labor Day. A lot of people come from the different islands and DC, Atlanta, Florida etc... for the Labor Day Carnival in NYC.

I will be bringing in a band from the islands, so I have (Air, Hotel, Advertising, sound, food for the artist etc....)

I wanted to know from you guys who have clubs or bars who sometime have live music if you think that with 700 capacity on a Friday night does $6000 in liquor sales seems average on a Friday night?

I think tha people who go to bars, usually go to drink (this is primary) versus someone who is going to a club or to see a band they usually go to dance, the drinking is secondary. I have never sold liquor, so $6000 seems like a whole lot of sales.

I pass by the spot and I never see a line on a Friday, so I think on a Friday the most would be 25% to 50 % capacity say $1750 to $3500 from cover at 10 dollars. With this assumption how much would you guess the bar makes?

I am trying to respond to this $6000 guarantee, with an offer to straight out rent with an offer that would be reasonable taking in mind what he probably makes on a Friday night. Plus looking at his costs for security, electricity, etc... The more realistic my offer the better.

If you can actually pack the place then $6,000 in bar sales is not hard. That said it's theoretically in your best interest to negotiate this number down.

However, in my experience promoters don't always try to negotiate the best guarantee. Sometimes they come to us with: I'll guarantee you X dollars. And we're like, are you crazy you'll lose money for sure. So.. they shrug off big loses resulting from high guarantees because they just want to get their foot in the door... and after a few weeks they start rolling it in.

I don't have any experience in Caribbean music so tactics for say promoting techno music might not work as well.

I would say keep the door, negotiate down the price if you can, maybe go to the club a few Friday nights and see how busy the place actually is...

If its a bust then you might have an easier time negotiating with the owner for a more fair price, though its a Labor Day event which is a holiday. Is it usually a Caribbean place or does it cater to other music genres? I am also not experienced with live bands, just DJ's mostly.

You said your paying for all the stuff for the band and that can get quite expensive really fast. If you do the math I don't, I personally dont see it working out if you need to guarentee him 6k and you have a potential to gain at least 7k if you get it full but if you dont your in debt and not helping yourself with gaining money for your future endeavor. Your more acting like a promoter.

Again negotiate with him and see what you can work out, always get everything in writing and signed by him. Get a back up plan in case your band decides to bail, cause it wouldnt make the club look good or you if they did.

Live bands for the most part cost more because there are more members and more to take care of.

Try 4k for bar sales and you could even offer half the door or some of the door though that isnt that best option it could help in successfully getting in the club that weekend. Remember you need to pay for promotion also if you plan on doing flyers and what not.

However, don't make it as long winded as a sponsorship proposal. The main thing in your proposal should be the numbers and terms: Split of the door, bar guarantee, expected revenue, who handles the door money, who pays the DJ/band, who pays for security (if any) etc...

Its basically going to tell him what you want to do, how your gonna do it, how much everyone can make from it, and then who deals with what. Make it somewhat detailed but yeah, shouldn't be over a page if it is its fine but time is money, so the money time he is spending on you the less time he is able to do other stuff.

Hello guys to update you about the venue rental.......

I emailed and left two messages with the management of the club, and the person never responded. I also found out that the legal capacity is 400.
I will start another thread with this other venues that I checked...

update

I finally caught up with the owner...and to my 3500 offer he said 4000 and he his considering even giving me a Saturday. The only thing is he admitted that the capacity is 400, but he can fit 700.. Isn't this a risk???

You really want a guarantee vs. paying cash up front. Try to get the guarantee lowered. If you meet the guarantee NO Cash will change hands = free rent for packing his place.
Lets say you get a $5000 guarantee. and only 250 people show up and spend $10 each at the bar. You only owe the bar the difference of $2500 which you would take out of your door money. If 400 people show up and spend $12 each or 250 spend $20 then you would owe nothing and keep the door. The bar owner does the guarantee just to make sure his costs are covered.

boz....

How will I be sure to know what he makes in drinks? He could say anything right?
In speaking to him I could telll being that he doesn't know me, that he is concerned if enough people will actually come and drink.

He also seemed interested in getting money in his hands...He said with the quickness that he would draw up the contract, and for me to put down a deposit of $1000.

Someone on this board gave me advice a couple of years ago that legal capacity is important, because if his capacity is 400 and he says that he can fit 700, and he goes over 400 the concert can be shutdown if the wrong person shows up. All it takes is a complaint of any kind from someone complaining about the noise etc... and if the wrong person shows up...I could loose my shirt....

UPdate...

I found out that the venues didn't have the equipment to satisfy a basic technial rider. They werent equip to play live music. I would have to bring in external production, which was $2500 for a 400 capaciry space, and 5500 for a line array for a 700 or 1200 capacity space. The space with 700 the cost was $12000 but you have to bring external production. They let you bring catering and you can control the cash bar, and ticketing. NICE Space

The other venues (ballrooms) even NIcer Space.. the rental was fair $5000 but you have to use their security, which comes to $10,000 and you could use external production, $5500,but you only get the door they get the cash bar.

At this time the numbers weren't looking cost effective, so I'm thinking I might push the date until Thanksgiving weekend...

With the numbers you are kicking around, you are taking a big risk to make small profit. I think the venue owner sees you as untested promoter and is making you pay through the nose for the chance to prove what you can do. Or maybe he's got the only available venue in the market or his business is so strong he doesn't need to work with outside promoters. I can't see any professional promoter, someone who makes a living from promoting, taking this deal. There are 1,500 seat concert venues you ccould rent for less money.

I work in one the top markets in the U.S. and here's my deal with a 800 capacity venue.

Rent: $1000.00 plus 10% of the Box Office Gross.
For this fee I get staging, the box office, ticketing, staff, security and more. My shows are included in all venue strip advertising-promotion and on their web site. The venues sound and lights are adequate for most shows, though I am responsible for back-line, artists hospitality and I do carry my own insurance.
The bar and revenue from ticket fees stays with the venue. Weeknight rent is 1/2.

Our company is the first and professional manufacturer and distributor specializing in researching,developing,producing,selling of stage special effects products and stage lights in China.we established in 1988 and located in changsha city,we have passed ISO2000:9001 international quality certificate and CE.